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OVERVIEW

Chinese production of automobiles rose from 42,000 cars per year in 1990 to 2.3 million in 2004; the number of passenger vehicles on the road doubled every two and a half years through the 1990s and continues to grow. In China Shifts Gears, Kelly Sims Gallagher identifies an unprecedented opportunity for China to "shift gears" and avoid the usual problems associated with the automobile industry—including urban air pollution caused by tailpipe emissions, greenhouse gas emissions, and high dependence on oil imports—while spurring economic development. This transformation will only take place if the Chinese government plays a leadership role in building domestic technological capacity and pushing foreign automakers to transfer cleaner and more energy-efficient technologies to China. If every new car sold in China had the cleanest and most energy-efficient of the automotive technologies already available, urban air pollution could be minimized, emissions of climate-altering greenhouse gases would be lower than projected, and the Chinese auto industry would continue to flourish and contribute to China's steady economic development. But so far, Gallagher finds, the opportunity to shift gears has been missed.

Gallagher looks in detail at three U.S.-Chinese joint ventures: Beijing Jeep, Shanghai GM, and Chang'An Ford. These case studies are based on original research, including interviews with 90 government officials, industry representatives, and experts in both countries. Drawing from the case studies, Gallagher explores the larger issues of the environmental and economic effects of technology transfer in the automobile industry and the policy implications of "leapfrogging" to more advanced technology.

Kelly Sims Gallagher is Director of the Energy Technology Innovation Project at the Belfer Center for Science and International Affairs and Adjunct Lecturer at Harvard University's John F. Kennedy School of Government.

"Gallagher...has produced an excellent analysis of the development of the Chinese automobile industry....Her work is also an important case study of the impact of public policies (and the absence of public policies) on the diffusion of specific types of technologies in an environment of increasingly globalized industrial and commercial relationships. In particular, Gallagher demonstrates that the potential for adoption of more environmentally clean technologies has largely been squandered....By focusing narrowly on the automobile industry, this text clearly reveals some of the structural flaws in the current globalization process as well as the political failures of American administrations to take advantage of the current conjuncture in economic relationships to foster more sustainable forms of economic growth and development." — From Choice magazine (February 2007)

"Kelly Sims Gallagher, one of the savviest early analysts of climate policy, has devoted the last few years to understanding the Chinese energy transition. Now the director of the Energy Technology Innovation Project at Harvard's Kennedy School, she has just published a fascinating account of the rise of the Chinese auto industry. Her research makes it clear that neither American industry nor the American government did much of anything to point the Chinese away from our addiction to gas-guzzling technology; indeed, Detroit (and the Europeans and Japanese to a lesser extent) was happy to use decades-old designs and processes. "Even though cleaner alternatives existed in the United States, relatively dirty automotive technologies were transferred to China," she writes. One result is the smog that is choking Chinese cities; another is the invisible but growing cloud of greenhouse gases, which come from tailpipes but even more from the coal-fired utilities springing up across China. In retrospect, historians are likely to conclude that the biggest environmental failure of the Bush administration was not that it did nothing to reduce the use of fossil fuels in America, but that it did nothing to help or pressure China to transform its own economy at a time when such intervention might have been decisive." — From The New York Review of Books (November 2006)

"I am very impressed with this book. Gallagher addresses the extremely important question of whether foreign direct investment can be an effective vehicle for the transfer of clean technology, in particular in the automotive sector. The question has enormous implications not only for China (air pollution, cancer rates) but for the world (oil prices, climate change). The importance of this book is therefore very great."—Judith Shapiro, School of International Service, American University, author of Mao's War Against Nature: Politics and the Environment in Revolutionary China

"This is an extremely important and timely book. Gallagher's account of the three major China-U.S. joint ventures will not only shed light on the current debate in China about foreign direct investment and indigenous technological capabilities; it will also contribute to effective public policies to address the monumental challenges of pollution and oil consumption presented by the tremendous growth of the Chinese auto market. I enjoyed it thoroughly!"—Xue Lan, Director, China Institute of Science and Technology Policy, Tsinghua University, Beijing

"China Shifts Gears is an excellent roadmap for those seeking to analyze the complexities of China's economic performance. It critically explores new avenues for understanding the dynamics of technological innovation in emerging countries. An inspirational resource for policy makers, scholars, and international policy students."—Calestous Juma, Belfer Center for Science and International Affairs, John F. Kennedy School of Government, Harvard University

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